Latest news with #R2.1bn
Daily Maverick
5 days ago
- Business
- Daily Maverick
R257bn for Eskom to meet minimum requirements, aims for 40% emissions reduction by 2030
The power utility said it planned to achieve a 40% reduction in emissions by 2030 at the fleet level. Its preferred approach would cost R77bn in capital expenditure and R2.1bn in annual operational expenditure. Eskom CEO Dan Marokane says it will cost the South African taxpayer up to R257-billion for the utility to do the necessary upgrades for it to meet government-mandated minimum emission standards. Compliance, in this way, could translate into the equivalent of up to a 10% tariff increase. He and members of Eskom's executive were briefing Parliament's Select Committee on Agriculture, Land Reform and Mineral Resources on Tuesday, 10 June, in Cape Town. The briefing outlined the financial costs, the direct threat to the nation's power supply and the significant potential disruption to electricity supply that would come as a consequence of the legally mandated environmental regulations. Eskom's team put a figure of about R257-billion in capital expenditure (Capex) on what it would take to achieve full compliance with minimum emission standards across six of its major power stations, namely Medupi, Majuba, Matimba, Kendal, Lethabo and Tutuka. This would also incur R6.3-billion in annual operating costs (Opex). To date, Eskom has spent more than R3-billion on emission abatement projects, with an additional R15.6-billion allocated over the next five years. In March, Daily Maverick reported that Minister of Forestry, Fisheries and the Environment Dion George granted Eskom limited exemptions from minimum emission standards for eight of Eskom's coal-fired power stations. Two power stations, Duvha and Matla, were granted nine-year minimum emission standards exemptions until their planned decommissioning dates in 2034. Six other power stations were granted five-year minimum emission standards exemptions until 1 April 2030. These are Kendal, Lethabo, Majuba, Matimba, Medupi and Tutuka. Marokane said the implications of compliance with the emissions standards extended beyond the financial. Up to 22 gigawatts (GW) of the coal fleet's generating capacity is 'at risk' of being shut down if it cannot comply with the stringent post-2030 standards for sulphur dioxide (SO2) emissions, which, while beneficial from an environmental perspective, could imperil the progress Eskom has made in taming load shedding should that capacity not be replaced accordingly. This risk materialises after that 1 April 2030 deadline, when the exemptions granted for several stations expire. Given that retrofitting the necessary Flue Gas Desulphurisation technology takes 7-10 years, decisions are needed now to avert this cliff-edge scenario. Eskom, Marokane told members of the committee, was of the view that its preferred approach was not full compliance but instead, it would focus on SO2 reduction at its newest plants, Kusile and Medupi, and complete particulate matter and nitrogen oxide upgrades at six stations. This path would cost R77-billion in Capex and R2.1-billion in annual Opex. However, as was noted by members of the committee, even this 'cheaper' option was severely underfunded, as mentioned above, with R15.6-billion allocated over the next five years. Moreover, Marokane explained, Eskom intends to expand its 'clean energy capacity' and 'optimise the existing coal fleet' to meet a 40% reduction in emissions by 2030 at the 'fleet level'. This means that the coal station fleet in aggregate would see a 40% reduction in emissions, but this would be unevenly distributed from station to station because some of the newer stations may see their production ramp up to compensate for the shutdown of older stations. Health costs While Eskom's briefing touched on the socioeconomic consequences of plant shutdowns, such as the impact on 14,000 direct jobs, it did not provide an assessment of the direct health costs and mortality associated with its emissions. This gap was highlighted by a recent report titled Unmasking the Toll of Fine Particle Pollution in South Africa. That report by Greenpeace Africa and the Centre for Research on Energy and Clean Air (CREA) found that in 2023 alone, 42,000 South Africans died from exposure to fine particle pollution (PM2.5), including more than 1,300 children under five. It combined PM2.5 concentrations (sourced from satellite data, ground monitoring and atmospheric models) with population and health data from the Global Burden of Disease database to calculate health impacts. PM2.5 refers to airborne particles smaller than 2.5 micrometres, mainly formed by burning coal and fuel. Daily Maverick wrote that the report estimates that PM2.5 pollution cost the country more than R960-billion in 2023 – equivalent to 14% of GDP – through premature deaths, illness, lost productivity and overburdened health systems. These particles, as CREA analyst Lauri Myllyvirta previously explained to Daily Maverick, are 'small enough to pass from lungs to the bloodstream and wreak havoc on all our internal organs'. Communities in the Highveld region and Gauteng and Mpumalanga, which are home to the country's largest coal-fired power plants and industrial zones, are hardest hit. Briefing the committee on Tuesday, Deidre Herbst, senior manager for environmental management in Eskom's Generation Division, confirmed particulate matter's deleterious impact. While sulphur dioxide was the 'biggest challenge', particulate matter caused the most harmful health impacts, she explained. DM DM
Zawya
10-04-2025
- Business
- Zawya
South Africa: VAT hikes and fuel price cuts, a mixed bag for small businesses
Although the minister emphasised that the budget would continue to prioritise social grant recipients and public-sector workers, small businesses weren't left out. The Department of Small Business Development has set aside R2.1bn over the medium term to support around 120,000 competitive SMEs—especially those owned by women, youth, and people with disabilities in townships and rural areas. Additionally, the government allocated R313.7m to the establishment of SMME hubs to support business expansion, while the R1tn allocated to infrastructure will be a positive for SMEs due to its impact on the infrastructure supply chain and because all businesses will benefit from investment in roads, water management and railways. There was a significant 51% reduction in the cost of a 1.5GB data bundle, which is good news for small businesses and individuals. Let's hope that all these commitments remain intact when the budget finally makes it through the legislative process. Miguel da Silva, group executive: business banking at TymeBank, takes a closer look at what will affect SMEs most in April and beyond. Transformation Fund proposed President Ramaphosa, in his 2025 State of the Nation Address on 6 February, announced the much-discussed R100bn Transformation Fund. The aim: Over the next five years, black-owned small businesses will be able to access financial support through this fund, which is expected to be largely financed by the private sector. The reality: There are significant, valid concerns raised about this proposed fund. There is heavy critique that the fund is mainly focussed on the contributions from big business rather than the desired outcomes, which leads to worries about it being yet another fund ripe for looting. The Minister of Trade, Industry and Competition, Parks Tau, published the Draft Transformation Fund concept document on 19 March, with a deadline for public commentary of 7 May. While fuel prices are down, load-shedding returns and VAT increase looms The latest fuel price decrease is good news for SMEs that rely on vehicles for deliveries and logistics. Effective 2 April, the price of 95 unleaded petrol decreased by 72c/l and 93 unleaded petrol decreased by 58c/l, while diesel prices dropped by between 84c and 86c/l. Unfortunately, after months of no load-shedding, the dreaded power outages have returned. To add insult to injury, as of 1 April, Eskom direct customers are now paying an extra 12.7% – well above the inflation rate – while municipal customers will see prices go up by at least 11.32% from 1 July. The impact of these cost increases on SMEs will be substantial. Businesses may try and absorb them initially but will eventually need to either up their prices or find innovative ways to reduce them. It's clear that exploring energy alternatives is not just a matter of ensuring a stable supply – renewables in particular look more and more appealing from a cost-saving perspective as grid electricity continues to get more expensive. SMEs will take another knock when the 0.5% VAT hike tabled for 1 May 2025 comes into effect. The proposed 2025 increase, which at this stage can only be stopped by a legislative intervention, will take VAT up to 15.5%. Unless an SME is VAT-registered and works only with other businesses that are VAT-registered, it will have to pay more for its supplies. Consumers will have to shoulder the burden of the higher tax, although the government is planning on expanding the basket of zero-VAT-rated food items, among other measures. The SARB firm on the repo rate – for now At least it did not go up! But by holding the repo rate firm at 7.5% on 30 March, the South African Reserve Bank has ensured there will be no relief for those who use credit. This decision makes the prime lending rate 11%. The SARB cited rising inflation risks, global economic uncertainty, and the effect of fiscal policy changes as reasons for its cautious approach. What is certain is that continued high rates will keep the screws on households and SMEs alike. Spaza shops face onerous registration effort According to research by Trade Intelligence, there are approximately 150,000 spaza shop owners across the country, collectively valued at around R197bn in 2023. Recently government has sought to make shop owners register their businesses to ensure better safety, compliance and regulation. The registration is onero,us to say the least. Shop owners need to assemble a mass of supporting documents, and the process is laborious and expensive. Tens of thousands of spaza shops have already been found non-compliant, and hundreds have been closed. Consider the effects on a sector estimated by the 2021 South African Township Marketing Report to employ 2.6 million people and contribute 5.6% to GDP if these closures continue. April's SME environment is anything but a joke. While government departments profess their desire to help SMEs, we must still contend with regulations, red tape and a repo rate that keeps SMEs and citizens from gaining even the slightest financial relief. Add in the depressive effects of a looming VAT hike and turning our sluggish GDP growth around becomes a really tall order. All rights reserved. © 2022. Provided by SyndiGate Media Inc. (
